Mesenchymal stromal cells, also referred to as (mesenchymal stem cells; MSCs), are ideal candidates for regenerative medicine and cellular therapeutics due to their anti-inflammatory and tissue reparative properties. MSCs have been the focus of a multitude of clinical trials exploring their therapeutic utility in different disease conditions. MSCs are either administered locally or systemically, depending on the disease setting. The majority of clinical trials utilise intravenous administration of MSCs, which results in the entrapment and apoptosis of MSCs in the lung. Efferocytosis of apoptotic MSCs leads to anti-inflammatory effects that contribute to the therapeutic benefits of MSC therapy. On the other hand, local delivery of MSCs is aimed at localising the cells at the site of injury with subsequent engraftment, differentiation or tissue repair. Regardless, cellular therapy approaches utilising MSCs have been hindered by MSC heterogeneity, donor variability, and unclear mechanisms governing their immunomodulatory properties. Hence, there is a need to design improved therapeutic protocols that would enhance the therapeutic efficacy of MSCs. To this end, we are utilising different approaches to improve the effectiveness of MSC therapy. To enhance the regenerative and tissue repair potential of locally administered MSCs, we are implementing a new technology to generate a homogeneous population of safe and hypoimmunogenic MSCs from pluripotent stem cells for therapeutic applications that require differentiated MSCs to persist at the site of injury. On the other hand, we are investigating the release of bioactive factors from apoptotic MSCs that confers therapeutic efficacy of intravenously administered MSCs. Our data provide further understanding of the mechanisms of MSC therapy and reveal opportunities for novel therapeutic interventions.